Go Lean Commentary
The book Go Lean … Caribbean was spot on! It reported in 2013 when published, that the assessment of Puerto Rico was dire:
The Greece of the Caribbean.
Then again in previous blogs, this commentary detailed the desperate solutions being sought by the ailing Puerto Rico (April 2014). The island is between ‘a rock and a hard place’ (March 2015)!
Now this new article reports how the governmental administrations of this territory are willing to short-change investors and renege on financial promises that were made to previous bondholders. This is bad for the island’s credit rating and country risk assessments. This gross disregard for the “Full Faith and Credit” is egregious; rather the credit image of any state government should be jealously protected. This story – see here – fully describes the urgent need to reboot the economic, security and governing engines of this island:
Title: Puerto Rico bondholders coalition launches ad campaign
WASHINGTON, DC — Main Street Bondholders Coalition, a project of the 60 Plus Association, America’s largest center-right seniors organization representing more than 7.2 million older Americans, has launched a paid advertising campaign in Washington and Puerto Rico to highlight what it describes as Governor Alejandro Garcia Padilla’s plan to violate Puerto Rico’s constitution at the expense of small bondholders.
“Governor Garcia Padilla’s plan – to declare debts un-payable and then attack bondholders by calling them ‘vultures’ – is both unjust and unconstitutional. Our coalition includes Puerto Rican residents and mainland seniors living on fixed incomes, who staked their retirement in bonds backed by Puerto Rico’s full faith and credit. Congress must oppose the governor and his team’s reckless plan that disregards the rule of law and devastates the lives of these small investors,” said Matthew Kandrach, vice-president for 60 Plus.
Padilla’s plan is so radical and unprecedented that members of his own political party are speaking out against it:
- Nadal Power, chairman of Puerto Rican Senate Committee on Treasury and Public Finance: “We have to respect what the Constitution says and to do otherwise would take away a lot of credibility, not only the word of Puerto Rico, but compliance with the supreme law.”
- Eduardo Bhatia, president of the Senate of Puerto Rico: “Puerto Rico has not been disciplined. We must restore confidence. We have to reduce government spending.”
Added Kandrach, “Puerto Rico can fix its financial problems, but any solution must be built on the cornerstone of genuine fiscal reform, not empty rhetoric and punishing investors. The governor and his circle of advisors, who are the same bunch representing deadbeat sovereigns like Argentina, have chosen to manufacture a crisis in order to get Washington’s help in their plan to stiff creditors. Congress must not allow that to happen.
“Puerto Rico would benefit from a fiscal control board, just like the District of Columbia had in the 1990s when it faced financial crisis. Congress must also oppose the governor’s plan to restructure Puerto Rico’s constitutional bonds. Allowing him to do so would set a terrible precedent, and open a Pandora’s Box of other state defaults. No retirement account in America would be safe.”
Main Street Bondholders Coalition is a project of the 60 Plus Association that is made up of small bondholders from across America who are committed to a policy process that returns Puerto Rico to sound financial management, respects the rule of law, and protects their retirement savings.
Source: Caribbean News Now – Regional Online News Source – Retrieved 09-09-2015 http://www.caribbeannewsnow.com/topstory-Puerto-Rico-bondholders-coalition-launches-ad-campaign-27533.html
The summary of this news article is that it looks like Puerto Rico is “cruising for a bruising”, flirting with Bankruptcy. They resemble a Failed-State in some Banana Republic, rather than an American sovereign territory in the southern shadows of its bigger-richer mainland. This reflects a broken eco-system.
The Go Lean book serves as a roadmap to re-boot the island’s economic engines. The focus of the roadmap is the introduction and implementation of the region-wide professionally-managed, deputized technocracy of the Caribbean Union Trade Federation (CU). This roadmap asserts that the problems of Puerto Rico (by extension, the entire Caribbean) are too big for any one member-state to solve alone. There is the need to leverage the problems and solutions across the remaining of the Caribbean region; all 30 member-states.
The CU roadmap is a request for Puerto Rico to confederate with the rest of the Caribbean, their English-speaking, Dutch-speaking, French-speaking Caribbean neighbors; despite their political status. Puerto Rico needs the strategies, tactics, implementations and advocacies that would emerge from such integration. As reported in the previous April 2014 blog:
Puerto Rico needs the CU!
The CU needs Puerto Rico!
For the roadmap to be successful there is interdependence among these Caribbean member-states, since they are all too small. There is an overbearing need for leverage and economies-of-scale. This point was declared early in the book, in the opening Declaration of Interdependence (Page 11 – 14), with these statements:
viii. Whereas the population size is too small to foster good negotiations for products and commodities from international vendors, the Federation must allow the unification of the region as one purchasing agent, thereby garnering better terms and discounts.
xi. Whereas all men are entitled to the benefits of good governance in a free society, “new guards” must be enacted to dissuade the emergence of incompetence, corruption, nepotism and cronyism at the peril of the people’s best interest. The Federation must guarantee the executions of a social contract between government and the governed.
xii. Whereas the legacy in recent times in individual states may be that of ineffectual governance with no redress to higher authority, the accedence of this Federation will ensure accountability and escalation of the human and civil rights of the people for good governance, justice assurances, due process and the rule of law. As such, any threats of a “failed state” status for any member state must enact emergency measures on behalf of the Federation to protect the human, civil and property rights of the citizens, residents, allies, trading partners, and visitors of the affected member state and the Federation as a whole.
xxiii. Whereas many countries in our region are dependent Overseas Territory of imperial powers, the systems of governance can be instituted on a regional and local basis, rather than requiring oversight or accountability from distant masters far removed from their subjects of administration. The Federation must facilitate success in autonomous rule by sharing tools, systems and teamwork within the geographical region.
xxv. Whereas the legacy of international democracies had been imperiled due to a global financial crisis, the structure of the Federation must allow for financial stability and assurance of the Federation’s institutions. To mandate the economic vibrancy of the region, monetary and fiscal controls and policies must be incorporated as proactive and reactive measures. These measures must address threats against the financial integrity of the Federation and of the member-states.
xxix. Whereas all Caribbean democracies depend of the free flow of capital for municipal, public and private financing, the institutions of capital markets can be better organized around a regional monetary union. The Federation must institute the controls to insure transparency, accounting integrity and analysis independence of the securities markets, thereby shifting the primary source of capital away from foreign lenders to domestic investors, comprising institutions and individuals.
The CU requires the full participation of all 30 member-states in the region. A careful assessment of government finances, performed for the Go Lean book, shows that the finances for all Caribbean member-state governments are curtailed – the region is in crisis. One state after another feature deficits or excessive high Debt-to-GDP rates. (The World Bank, International Monetary Fund and the Inter-American Development Bank have monitors permanently stationed in the region). For many states, the 2008 Global Financial Crisis still lingers.
To assuage the economic crisis for Puerto Rico and the other Caribbean member-states, the Go Lean roadmap focuses on both increasing revenues, lowering operational expenses, and refinancing previous high-interest debt instruments (bonds). The roadmap is a complete re-boot! Imagine new revenue streams and a separation-of-powers to off-load some of the operational burdens to the CU Trade Federation. These are the prime directives of the Go Lean roadmap, pronounced as these 3 statements:
- Optimization of the economic engines in order to grow the regional economy to $800 Billion and create 2.2 million new jobs.
- Establishment of a security apparatus to protect the resultant economic engines.
- Improvement of Caribbean governance to support these engines.
The book Go Lean … Caribbean introduces the CU so as to assume much of the Caribbean economic, security and governing functionality. The roadmap makes Puerto Rico, and the rest of the Caribbean, a better place to live, work and play. How? By the adoption of a series of community ethos, plus the execution of the following strategies, tactics, implementations and advocacies to elevate the societal engines of the region and to stop any downward spiral into Failed-State status. See the lists here:
|Assessment – Caribbean Single Market & Economy||Page 15|
|Assessment – Dutch Caribbean – Integration & Secessions||Page 16|
|Assessment – French Caribbean – Organization & Discord||Page 17|
|Assessment – Puerto Rico – The Greece of the Caribbean||Page 18|
|Community Ethos – Economic Principles – Economic Systems Influence Individual Choices||Page 21|
|Community Ethos – Economic Principles – Consequences of Choices Lie in the Future||Page 21|
|Community Ethos – Governing Principles – Lean Operations||Page 24|
|Community Ethos – Ways to Impact the Future||Page 26|
|Community Ethos – Ways to Promote Happiness||Page 36|
|Community Ethos – Ways to Impact the Greater Good||Page 37|
|Strategy – Vision – Confederate all 30 member-states/ 4 languages into a Single Market||Page 45|
|Strategy – Mission – Build and foster local economic engines||Page 45|
|Tactical – Ways to Foster a Technocracy||Page 64|
|Tactical – Growing the Economy to $800 Billion GDP||Page 68|
|Tactical – Separation-of-Powers – CU Federal Government versus Member-State Governance||Page 71|
|Implementation – Assemble All Regionally-focus Organizations of All Caribbean Communities||Page 96|
|Implementation – Ways to Pay for Change||Page 101|
|Implementation – Ways to Better Manage Debt||Page 114|
|Implementation – Ways to Foster International Aid||Page 115|
|Planning – 10 Big Ideas – Forging the Single Market for the whole region||Page 127|
|Planning – Ways to Improve Trade||Page 128|
|Planning – Ways to Improve Interstate Commerce||Page 129|
|Planning – Ways to Make the Caribbean Better||Page 131|
|Planning – Lessons Learned from 2008||Page 136|
|Planning – Lessons Learned from Egypt – Dysfunction in a Tourism Mecca||Page 143|
|Advocacy – Ways to Grow the Economy||Page 151|
|Advocacy – Ways to Create Jobs||Page 152|
|Advocacy – Ways to Improve Credit Ratings||Page 152|
|Advocacy – Ways to Improve Governance||Page 168|
|Advocacy – Ways to Better Manage the Social Contract||Page 170|
|Advocacy – Ways to Impact Justice||Page 177|
|Advocacy – Ways to Improve Homeland Security||Page 180|
|Advocacy – Ways to Impact Wall Street||Page 200|
|Advocacy – Ways to Impact US Territories||Page 244|
The Go Lean roadmap alerts the Caribbean – the 42 million people, 10 million Diaspora and 80 million visitors – that the effort to elevate the societal engines is heavy-lifting. This is no easy task, serious-minded leadership is necessary. There can be no reneging of commitments and repayments of previous bond obligations, as related in the foregoing news article and this VIDEO here:
VIDEO – Puerto Rico on brink of debt default – https://youtu.be/BBwtxF52OrE
Published on Aug 3, 2015 – Envision Capital Management CEO Marilyn Cohen explains how Puerto Rico got into poor fiscal shape.
Category: News & Politics
License: Standard YouTube License
There must be new solutions that considers the pasts, accepts the present and fosters the future.
Change has come to the Caribbean. Puerto Rico and all neighboring member-states are admonished to lean-in to the empowerments and elevation described in the book Go Lean … Caribbean. The benefits of this roadmap are needed urgently now! We need the emergence of a $800 Billion regional economy, 2.2 million new jobs. We need the Caribbean homelands to become better places to live, work and play. 🙂
Download the book Go Lean … Caribbean – now!